DESCRIPTION (adapted from the application) Crohn's disease is a chronic inflammatory disorder of the gastrointestinal tract. A variety of current medical therapies have been directed at reduction of the inflammatory component of this condition; nonetheless some patients remain refractory to treatment. Our group recently performed an open-label trial of 200 mg/day of thalidomide, a potent inhibitor of tumor necrosis factor (TNF) for the treatment of twenty-two patients with refractory Crohn's disease. We observed an initial rapid response to thalidomide. Additionally, study patients exhibited a 59% response rate to thalidomide after four weeks of therapy and a 64% response rate after 12 weeks. After twelve weeks of thalidomide therapy, 50% of patients enrolled were in remission. The current proposed study is a randomized, double-blind comparison of two doses (50 mg and 200 mg) thalidomide versus placebo in a group of patients with Crohn's disease that is refractory to standard therapy with or without steroid dependence. A total of ninety patients with Crohn's disease will be enrolled at two centers. All will be symptomatic despite steroids and/or immunomodulating agents. Patients will be enrolled for active mucosal Crohn's disease and/or symptomatic perianal or perirectal fistulas. They will be randomized by a single study coordinator. Neither the patient or physician will be aware of the administered treatment. Crohn's Disease Activity Index (CDAI), a Physician Global Score, and blood work including CBC, erythrocyte sedimentation rate (ESR), C reactive protein (CRP), cytokine assays and an electromyogram (EMG) will be obtained for all. Patients will be dispensed a four week supply of medication. They will return after one week of treatment and then every four weeks for a CDAI measurement and pill count. Women of childbearing potential will undergo baseline pregnancy testing and continuous pregnancy testing (every two weeks). At twelve weeks, an EMG, CDAI and a Physician Global score will be obtained as well as blood work as previous. Responding patients will remain on treatment up to one year at which time an EMG will be repeated. This study will help to clarify the utility and toxicity of two doses of thalidomide in the treatment of refractory Crohn's disease. It will also help to characterize previous observations of a rapid response to thalidomide in this patient group.